ARDEN PARK
RECREATION AND PARK DISTRICT
FINANCIAL STATEMENTS
JUNE 30, 2015
ARDEN PARK
RECREATION AND PARK DISTRICT
FINANCIAL STATEMENTS
June 30, 2015
Table of Contents
Independent Auditor’s Report
1
Management Discussion and Analysis
3
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position
Statement of Activities
6
7
Fund Financial Statements
Governmental Funds:
Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes In Fund Balances to the Statement of Activities
Notes to the Financial Statements
8
9
10
11
12
Required Supplementary Information:
Budgetary Comparison Schedule:
General Fund
Special Revenue Fund
21
22
Note to the Required Supplementary Information
23
Report on Internal Control over Financial Reporting
24
LARRY BAIN, CPA
An Accounting Corporation
2148 Frascati Drive, El Dorado Hills, CA / 916.601-8894
lpbain@sbcglobal.net
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Arden Park Recreation and Park District
Sacramento, California
We have audited the accompanying financial statements of the governmental activities and fund information which
comprise the basic financial statements of Arden Park Recreation and Park District as of and for the fiscal year
ended June 30, 2015, as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
the accounting principles generally accepted in the United States of America; this includes the design,
implementation and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our Responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall financial statement
presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities and fund information of the Arden Park Recreation and Park District
as of June 30, 2015, and the changes in financial position, of those activities and funds for the fiscal year then ended
in conformity with U.S. generally accepted accounting principles.
1
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion
and analysis on pages 3–5 be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it
to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the information
for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on
the information because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance.
Other Information
We have also issued our report dated October 23, 2015 on our consideration of the District’s internal control over
financial reporting. That report should be read in conjunction with this report in considering our audit.
The required supplementary information as listed in the table of contents, are not a required part of the basic
financial statements but are supplementary information required by the Governmental Accounting Standards Board.
We have applied certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Larry Bain, CPA
An Accounting Corporation
October 23, 2015
2
Arden Park Recreation and Park District
Required Supplementary Information
Management’s Discussion and Analysis
June 30, 2015
This section of the Arden Park Recreation and Park District's annual financial report presents an analysis of the
District's financial performance during the fiscal year ended June 30, 2014. This information is presented in
conjunction with the audited basic financial statements, which follows this section.
FINANCIAL HIGHLIGHTS FOR FISCAL YEAR 2014



The assets of the District exceeded liabilities at the close of the 2013-2014 fiscal year by $1,791,089 (net
position). Of this amount, $626,680 (unrestricted net position) may be used to meet ongoing obligations
to citizens and creditors, and $1,162,905 is net investment in capital assets.
As of June 30, 2014 the district’s governmental funds reported combined fund balances of $646,466, of
which $536,004 is available to meet the District’s current and future needs (unassigned fund balance).
The District had no long-term debt outstanding as of June 30, 2014.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements.
The District’s basic financial statements are comprised of three components, government – wide financial
statements, fund financial statements and notes to the financial statements. This report also includes additional
required supplementary information in addition to the basic financial statements.
REQUIRED FINANCIAL STATEMENTS
Government – Wide Financial Statements are designed to provide readers with a broad overview of District
finances, in a manner similar to a private-sector business
The Statement of Net Position include information on the District's assets and liabilities and provide information
about the nature and amounts of investments in resources (assets) and the obligations to District creditors
(liabilities). Over time, increases or decreases in net position may serve as a useful indicator of whether the
financial position of the District is improving or deteriorating.
The Statements of Activities presents information showing how net position changed during the most recent fiscal
year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused
vacation leave).
Both of these government-wide financial statements distinguish functions of the District that are principally
supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the
District are recreational and park activities. There are no business type activities.
3
Arden Recreation and Park District
Required Supplementary Information
Management’s Discussion and Analysis (Continued)
June 30, 2014
Fund Financial Statements are groupings of related accounts that are used to maintain control over resources
that have been segregated for specific activities or objectives. The District, like other state and local governments,
uses fund accounting to ensure and to demonstrate finance-related legal compliance. All of the funds of the
District can be divided into one category: governmental funds.
Governmental funds are used to account for essentially the same functions reported as governmental activities in
the government-wide financial statements. However unlike the government-wide financial statements,
governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as well
as of balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating the District’s near-term requirements. Because the focus of governmental funds is narrower than that
of the government-wide financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term financing
decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues,
expenditures and changes in fund balances provide a reconciliation to facilitate comparison between
governmental funds and governmental activities.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found immediately
following the basic financial statements,
Other Information
In addition to the basic financial statements and accompanying notes, this report presents certain required
supplementary information concerning the District’s budgetary comparative information for the general fund.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Condensed Statement of Net Position
Fiscal Years Ended June 30, 2014 and 2013
Current and other assets
Capital assets (net)
Total Assets
Liabilities
Current/non current
Net Position
Net investment in capital assets
Net position restricted
Unrestricted net position
Total Net Position
$
2014
697,920
1,162,905
$
1,860,825
$
69,736
$
1,162,905
1,504
626,680
1,791,089
$
4
$
2013
591,190
1,200,491
$ 1,791,681
$
68,987
$ 1,200,491
1,504
520,699
$ 1,722,694
Arden Recreation and Park District
Required Supplementary Information
Management’s Discussion and Analysis (Continued)
June 30, 2014
Condensed Statement of Activities
For Fiscal Years Ended June 30, 2014 and 2013
Program Revenues:
Charges for Services
General Revenues:
Property Taxes
Use of Money and Property
Total Revenue
Expenses
Recreation and Park Activities
Changes in Net Position
Ending Net Position
$
2014
490,076
2013
$473,232
331,378
288
821,742
299,802
3,962
776,996
(753,347)
68,395
$ 1,791,089
(736,402)
40,594
$1,722,694
CAPITAL ASSETS
As of June 30, 2014 the District’s net investment in capital assets totaled $1,202,707. The investment in capital
assets includes land, buildings and improvements, site improvements, and equipment. The capital assets are
presented in the government – wide statement of net position. During the current fiscal year, the district made the
following purchases and improvements:
Driveway gate at Arden Park
$4,493
Community Center Sewer
$3,000
Completion of Arden Park Renovation
$18,403
Cresta Tennis resurface
$8,650
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
In 2013-2014, the District’s tax revenue increased from the previous year and program revenue has remained
strong. The 2014-2015 budget anticipates stable tax revenue and anticipates strong performance of recreation
programs. The Board of Directors is committed to making improvements to the parks in a manner that will ensure
a financial reserve to get the District through uncertain times.
ADDITIONAL FINANCIAL INFORMATION
This financial report is designed to provide the District's customers, investors and other interested parties with an
overview of the District's financial operations and financial condition. Should the reader have questions regarding
the information included in this report or wish to request additional financial information, please contact the
Arden Park Recreation and Park District Administrator at 1000 La Sierra Drive, Sacramento, California 95864.
5
ARDEN PARK RECREATION AND PARK DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2015
Governmental
Activities
Assets
Cash and investments
Receivables
Restricted cash and investments
Capital assets:
Land
Site improvements
Buildings and improvements
Equipment
Less: accumulated depreciation
Total Assets
Liabilities
Current liabilities:
Claims payable
Accrued payroll
Noncurrent liabilities:
Due in more than one year
$
$
821,945
1,519
555
39,300
1,128,884
871,162
245,077
(1,154,626)
1,953,816
$
21,083
Total Liabilities
88,042
Net Position
Net investment in capital assets
Restricted for trust funds
Unrestricted
Total Net Position
43,054
23,905
1,129,797
1,504
734,473
$
The notes to financial statements are an integral part of this statement
6
1,865,774
ARDEN PARK RECREATION AND PARK DISTRICT
STATEMENT OF ACTIVITES
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Expenses
Governmental Activities:
Recreation services
Total Governmental Activities
Charges for
Services
Total
$
801,603
$
526,652
$ (274,951)
$
801,603
$
526,652
$ (274,951)
General Revenues:
Taxes:
Property tax, levied for general purposes
Investment income
Total general revenues
Change in net position
Net position' - beginning
Net position - ending
The notes to financial statements are an integral part of this statement
7
348,484
1,152
349,636
74,685
1,791,089
$ 1,865,774
ARDEN PARK RECREATION AND PARK DISTRICT
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2015
General
Fund
Assets
Cash and investments
Receivables
Restricted cash and investments
Total Assets
Special Revenue Fund
Landscape and
Lighting Assessment
District
Totals
Governmental
Funds
$
713,351
1,251
555
$
108,594
268
-
$
821,945
1,519
555
$
715,157
$
108,862
$
824,019
$
33,323
23,905
$
9,732
-
$
43,055
23,905
Liabilities and Fund Balances
Liabilities
Claims payable
Accrued payroll
Total Liabilities
Fund Balances
Fund balances
Restricted developer deposits
Assigned
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
$
57,228
9,732
66,960
555
97,330
560,044
99,130
555
196,460
560,044
657,929
99,130
757,059
715,157
$
108,862
The notes to financial statements are an integral part of this statement
8
$
824,019
ARDEN PARK RECREATION AND PARK DISTRICT
RECONCILIATION OF GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
JUNE 30, 2015
Fund Balances of Governmental Funds
$
757,059
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Net investment in capital assets, are not current financial resources and are not
included in the governmental funds.
1,129,797
Compensated absences are not due and payable in the current period
and therefore are not reported in the funds.
Net position of governmental activities
The notes to financial statements are an integral part of this statement
9
(21,082)
$
1,865,774
ARDEN PARK RECREATION AND PARK DISTRICT
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
General
Fund
Revenues
Property taxes
Intergovernmental revenues
Charges for current services
Special assessments
Use of money and property
Other revenues
$
Total Revenues
344,249
4,235
310,897
38,828
6,612
Special Revenue Fund
Landscape and
Lighting Assessment
District
$
171,199
268
-
Total
Governmental
Funds
$
344,249
4,235
310,897
171,199
39,096
6,612
704,821
171,467
876,288
Expenditures
Current:
Recreation services
Capital outlay
550,187
53,272
162,236
712,423
53,272
Total Expenditures
603,459
162,236
765,695
Net Change in Fund Balances
101,362
9,231
110,593
556,567
89,899
646,466
Fund Balances, July 1, 2014
Fund Balances, June 30, 2015
$
657,929
$
99,130
The notes to financial statements are an integral part of this statement
10
$
757,059
ARDEN PARK RECREATION AND PARK DISTRICT
RECONCILIATION OF GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Net Change in Fund Balances - Total Governmental Funds
$
110,593
Amounts reported for governmental activities in the Statement of Activities
differs from the amounts reported in the Statement of Revenues, Expenditures
and Changes in Fund Balances because:
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities, the costs of those assets is allocated over their
estimated useful lives as depreciation expense or are allocated to the
appropriate functional expense when the cost is below the capitalization
threshold. This activity is reconciled as follows:
Cost of assets capitalized
Depreciation expense
53,272
(86,379)
Compensated absences reported in the statement of activities do not require
the use of current financial resources and, therefore, are not reported in
governmental funds.
(2,801)
Change in net position of governmental activities
The notes to financial statements are an integral part of this statement
11
$
74,685
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 1:
Summary of Significant Accounting Policies
The District was organized in 1949 by a resolution passed by the Board of Supervisors of Sacramento County. It is
operated under the direction of a five-member board duly elected and empowered by the electorate with sole
authority over the District operations. Although the District is independent from the Sacramento County Board of
Supervisors, its financial activities are processed through the County Auditor-Controller’s Office.
The accounting policies of the District conform to U.S. generally accepted accounting principles as applicable to
governmental units. The following is a summary of the more significant policies:
A. Reporting Entity
The District has defined its reporting entity in accordance with generally accepted accounting principles, which
provides guidance for determining which governmental activities, organizations and functions should be
included in the reporting entity. In evaluating how to define the District for financial reporting purposes,
management has considered all potential component units. The primary criterion for including a potential
component unit within the reporting entity is the governing body’s financial accountability. A primary
governmental entity is financially accountable if it appoints a voting majority of a component unit’s governing
body and it is able to impose its will on the component unit, or if there is a potential for the component unit to
provide specific financial benefits to, or impose specific financial burdens on, the primary government. A
primary government may also be financially accountable if a component unit is fiscally dependent on the
primary governmental entity regardless of whether the component unit has a separately elected governing board,
a governing board appointed by a higher level of government, or a jointly appointed board. All such component
units have been “blended” with the District’s other fund types and account groups. The following blended
component unit has a June 30 year-end.
Based upon the aforementioned oversight criteria, the following is a component unit of the District:
The Arden Park Lighting and Landscape Assessment District is included in the special revenue fund of the
District.
B. Basis of Accounting
Government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned or, for property tax revenues, in the period for
which levied. Expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Governmental funds are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized when both measurable and available. Measurable means
the amount of the transaction can be determined and available means collectible in the current period or soon
enough thereafter to be used to pay liabilities of the current period. Resources not available to finance
expenditures and commitments of the current period are recognized as deferred revenue or as a reservation of
fund balance. The District considers property taxes available if they are collected within sixty-days after yearend. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general longterm debt, as well as compensated absences and claims and judgments are recorded only when payment is due.
General capital acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term
debt and capital leases are reported as other financial sources.
12
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 1:
Summary of Significant Accounting Policies (Continued)
C. Non-Current Governmental Assets/Liabilities
GASB Statement 34 eliminates the presentation of account groups, but provides for these records to be
maintained and incorporates the information into the Governmental Activities column in the government-wide
statement of net position.
D. Basis of Presentation
The accounts of the District are organized and operated on the basis of funds. A fund is an independent fiscal
and accounting entity with a self-balancing set of accounts established for the purpose of carrying on specific
activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The
District’s resources are accounted for in these individual funds based on the purposes for which they are to be
spent and the means by which spending activity is controlled. For financial reporting, these funds have been
grouped into the fund types discussed below.
Governmental Fund Types
Governmental funds are used to account for the District's expendable financial resources and related
liabilities (except those accounted for in proprietary and similar trust funds). The measurement focus is
based upon determination of changes in financial position. The following are the District's governmental
funds:
General Fund - This fund accounts for all the financial resources not required to be accounted for in another
fund. This fund consists primarily of general government type activities.
Special Revenue Funds - This fund account for the activity of the landscape and lighting district that is
legally restricted to expenditures for specific purposes.
E. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenditures/expenses during the reporting period. Actual results could differ from those
estimates.
F. Restricted Assets
Restricted assets are financial resources generated for a specific purpose such as construction of improvements
and financing of debt obligations. These amounts are restricted, as their use is limited by applicable bond
covenants or other external requirements.
13
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 1: Summary of Significant Accounting Policies (Continued)
G. Compensated Absences
Compensated absences represent the vested portion of accumulated vacation and sick leave. In accordance with
GASB 16, the liability for accumulated leave includes all salary - related payments that are directly and
incrementally connected with leave payments to employees, such as Medicare taxes. A current liability is
recorded in the governmental fund type to account for these vested leave accruals, which are expected to be used
within the next fiscal year. The non-current (the amount estimated to be used in subsequent fiscal years) for
governmental funds is maintained separately and represents a reconciling item between the fund and
government-wide financial statement presentation.
H. Capital Assets
Capital assets, recorded at historical cost or estimated historical cost if actual historical cost is not available, are
reported in governmental activities column of the government-wide financial statements. Contributed fixed
assets are valued at their estimated fair market value. Capital assets include land, buildings and building
improvements and equipment. Capital assets are defined by the District as assets with an initial, individual cost
of more than $2,500.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets
lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed. Depreciation is recorded in the government-wide financial statements on the straight-line bases over
the useful life of the assets as follows:
Assets
Buildings
Building improvements
Improvements other than buildings
Equipment and machinery
I.
Useful Life
50 years
20 years
35 years
5 to 20 years
Property Tax
The District receives property taxes from the County of Sacramento, which has been assigned the responsibility
for assessment, collections, and apportionment of property taxes for all taxing jurisdictions within the County.
Secured property taxes are levied on January 1 for the following fiscal year and on which date it becomes a lien
on real property. Secured property taxes are due in two instalments on November 1 and February 1 and are
delinquent after December 10 and April 10, respectively, for the secured roll. Based on a policy by the County
called the Teeter Plan, 100% of the allocated taxes are transmitted by the County to the District, eliminating the
need for an allowance for uncollectible. The County, in return, receives all penalties and interest on delinquent
taxes. Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent if unpaid
by August 31. Property tax revenues are recognized in the fiscal year they are received.
14
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 1: Summary of Significant Accounting Policies (Continued)
J. Interfund Transactions
Operating transfers are transactions to allocate resources from one fund to another fund not contingent on the
incurrence of specific expenditures in the receiving fund. Interfund transfers are generally recorded as operating
transfers in and operating transfers out in the same accounting period. Transfers between governmental funds
are netted as part of the reconciliation to the government-wide presentation.
Note 2:
Cash and Investments
Cash and investments at June 30, 2015, consisted of the following:
Checking account
Imprest cash
Cash and investment in the County Treasurer
Total cash and investments
$
7,471
500
814,529
$
822,500
A. Investments Authorized by the California Government Code and the Entity’s Investment Policy
The table below identifies the investment types that are authorized for the Arden Park Recreation and Park
District by the California Government Code (or the District’s investment policy, where more restrictive). The
table also identifies certain provisions of the California Government Code (or the District’s investment policy,
where more restrictive) that address interest rate risk, credit risk and concentration of credit risk. This table
does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt
agreements of the District, rather than the general provisions of the California Government Code or the District
investment policy.
Authorized Investment Type
Investment pools authorized under CA
Statutes governed by Government Code
U.S. Treasury Obligations
Bank Savings Accounts
Federal Agencies
Commercial Paper
Negotiable Certificates of Deposit
Re-Purchase Agreements
Corporate Debt
15
Maximum
Maturity
Percentage
of Portfolio
Investment
in One Issuer
N/A
5 years
N/A
5 years
180 days
180 days
180 days
5 years
None
None
25%
75%
20%
20%
20%
25%
$40 million
None
None
None
None
None
None
None
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 2: Cash and Investments (Continued)
B. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of and
investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to
changes in market interest rates. Information about the sensitivity of the fair values of the District’s investments
to market interest rate fluctuations is provided by the following table that shows the distribution of the District’s
investment maturity:
Investment Type
Sacramento County*
Totals
*Not subject to categorization
$
$
Totals
814,529
814,529
Remaining Maturity (in Months)
12 Months
13-48
or Less
Months
$
814,529 $
$
814,529 $
-
C. Concentrations of Credit Risk
The investment policy of the District contains limitations on the amount that can be invested in any one issuer.
There are no investments to one issuer exceeding those limits.
D. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a
government will not be able to recover its deposit or will not be able to recover collateral securities that are in
the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the
failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the
value of its investment of collateral securities that are in the possession of another party. The California
Government Code and the District’s investment policy do not contain legal or policy requirements that would
limit the exposure to custodial credit risk for deposits or investments, other than the following provision for
deposits; The California Government Code requires that a financial institution secured deposits made by state or
local governmental units by pledging securities in an undivided collateral pool held by a depository regulated
under state law (unless so waived by the government unit). The fair value of the pledged securities in the
collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also
allows financial institutions to secure the District’s deposits by pledging first deed mortgage notes having a
value of 150% of the secured public deposits.
At June 30, 2015, the District’s deposits balance was $3,563 and the carrying amount was $7,971. The
difference between the bank balance and the carrying amount was due to normal outstanding checks and/or
deposits in transit. Of the bank balance, all was covered by the Federal Depository Insurance and none was
covered by collateral held in the pledging bank’s trust department in the District’s name.
16
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 2: Cash and Investments (Continued)
E. Investment in Government Pool
Investments are accounted for in accordance with the provisions of GASB Statement No. 31, which requires
governmental entities to report certain investments at fair value in the balance sheet and recognize the
corresponding change in fair value of investments in the year in which the change occurred. The District
reports its investment in the Sacramento County investment pool at fair value based on quoted market
information obtained from fiscal agents or other sources if the change is material to the financial statements.
Note 3: Property, Plant and Equipment
Activity for general fixed assets capitalized by the District is summarized below:
Balance
July 1, 2014
Capital assets, not being depreciated:
Land
Capital assets, being depreciated:
Site improvements
Structures and improvements
Equipment
Total capital assets, being depreciated
Less accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities, capital assets, net
$
$
Retirement/
Adjustments
Additions
39,300
1,075,613
871,162
245,077
2,191,852
(1,068,247)
1,123,605
1,162,905
$
-
$
53,271
53,271
(86,379)
(33,108)
(33,108)
$
-
$
-
Balance
June 30, 2015
$
$
Note 4: Long-Term Obligations
The Following is the long term obligation of Arden Recreation and Park District at June 30, 2015:
Balance
July 1, 2014
Governmental Activities
Compensated absences
Totals
$
$
18,282
18,282
Additions
$
$
17
21,884
21,884
Retirements
$
$
19,083
19,083
Balance
June 30, 2015
$
$
21,083
21,083
39,300
1,128,884
871,162
245,077
2,245,123
(1,154,626)
1,090,497
1,129,797
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 5: Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors
and omissions; injuries to employees; and natural disasters. The District together with other districts in the State
carry California Association For Park And Recreation Insurance (CAPRI), a public entity risk pool currently
operating as a common risk management and insurance program for member districts. The District pays an annual
premium to CAPRI for its general insurance coverage. Furthermore the District carries workers compensation
coverage with other districts in the State through the CAPRI. Membership in the California Association of
Recreation and Park Districts is required when applying for CAPRI.
The Agreement for Formation provides that CAPRI will be self-sustaining through member premiums. CAPRI
reinsures through commercial companies for excess claims for general and automobile liability and all risk property
insurance, including boiler and machinery coverage, is subject to a $2,000 deductible occurrence payable by the
District. Financial statements for CAPRI are available at the District’s office for fiscal year ending June 30, 2015.
Note 6: Defined Contribution Pension Plan
The District contributes to a deferred compensation plan. The plan is a single-employer plan with the assets held in
trust by ING Life Insurance and Annuity Company. All full time salaried employees are eligible but not required to
participate in the plan. The plan is defined in the Internal Revenue Code Section 457. At June 30, 2015 there were
five active members in the plan and one inactive member in the plan.
The District funds the plan with a matching contribution of up to 5% covered employees’ compensation for the
fiscal year ended June 30, 2015, as adopted by the Board of Directors.
Participant’s accounts are credited with the District’s contributions and the employee contributions. Investment
earnings and losses as well as administrative expenses are also charged to participant accounts. Allocations are
based on participant’s earnings and losses of chosen investments or account balances. The benefit to which a
participant is entitled is the benefit that can be provided from the vested portion of the participant’s account. The
employee becomes vested in the employer contribution after five years from date of hire. The employer
contribution stays with the pool if the employee leaves before vesting.
In case of partial or complete termination of the plan or discontinuance of employer contribution to the plan, the
rights to the plan benefits become fully vested regardless of any other provisions of the plan and trusts. The trust
accounts would continue until all accounts have been distributed in accordance with the provisions of the plan.
Upon participant termination from services due to death, disability or retirement, a participant may elect to receive
either a lump sum amount equal to the value of the participant’s vested interest in his or her account or
instalments over a period selected by the participant. For termination of service due to other reasons, a participant
may receive the vested interest in his or her account as a lump sum distribution. The portion of the account that is
not vested upon termination should be used to offset future employer contributions.
18
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 7: Net Position/Fund Balances
Net Position
The government-wide activities fund financial statements utilize a net position presentation. Net position are
categorized as invested in capital assets (net of related debt), restricted and unrestricted.



Net Investment in Capital Assets – This category groups all capital assets, into one component of net
position. Accumulated depreciation and the outstanding balances of debt that are attributable to the
acquisition, construction or improvement of these assets reduce the balance in this category.
Restricted Net Position – This category presents external restrictions imposed by creditors, grantors,
contributors or laws and regulations of other governments and restrictions imposed by law though
constitutional provisions or enabling legislation.
Unrestricted Net Position – This category represents net position the District, not restricted for any
project or other purpose.
Fund Balances – Governmental Funds
The District adopted a policy for GASB Statement No. 54, Fund Balance Reporting. GASB 54 establishes fund
balance classifications that comprise a hierarchy based on the extent to which a government is bound to observe
constraints imposed upon the use of the resources reported in governmental funds. While the classifications of
fund balance in the District’s various governmental funds were revised, the implementation of this standard had
no effect on total fund balance. Detailed information on governmental fund-type, fund balances are as follows:
General
Fund
Restricted for:
Developer Deposits
Total restricted
Committed:
Assigned to:
Park maintenance and development
Assigned to next years budget
General fund swimming pool plaster
Total assigned
Unassigned
Total fund balance
$
$
555
555
57,330
40,000
97,330
560,044
657,929
Note 8: Gann Limit
Total Revenue 2014-15 (all sources)
Amount of limit for 2014-15
$
876,288
1,017,231
Amount (under)/over limit (all sources)
$
(140,943)
19
Special Revenue
Fund
$
99,130
99,130
$
99,130
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Note 9: Revenue Limitations Imposed by California Proposition 218
Proposition 218, which was approved by the voters in November 1996, regulates the District’s ability to impose,
increase, and extend taxes and assessments. Any new increase or extended taxes and assessments subject to the
provisions of Proposition 218, requires voter approval before they can be implemented. Additionally, Proposition
218 provides that these taxes and assessments are subject to voter initiative and may be rescinded in the future years
by the voters.
Note 10: Operating Lease
On May 25, 2010, the district entered into an operating lease to purchase a copy machine. The monthly lease
payments are $319 and the term of the lease is sixty months. There is no bargain purchase option and the District
intends to return the equipment at the end of the lease.
Note 11: Commitments and Contingencies
Grants
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies. Any
disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The
amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the
district expects such amounts, if any, to be immaterial.
In the normal course of business, the District is subject to various lawsuits. Defense of lawsuits is typically handled
by the District’s insurance carrier and losses, if any, are expected to be covered by insurance.
20
ARDEN PARK RECREATION AND PARK DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Budgeted Amounts
Original
Final
Revenues
Property taxes
Intergovernmental revenues
Charges for current services
Use of money and property
Other revenues
$
Total Revenues
320,000
3,700
219,000
30,500
3,000
$
320,000
3,700
219,000
30,500
3,000
Actual
$
344,249
4,235
310,897
38,828
6,612
Variance
Favorable
(Unfavorable)
$
24,249
535
91,897
8,328
3,612
576,200
576,200
704,821
128,621
Expenditures
Salaries and benefits
Services and supplies
Capital outlay
Contingency
379,924
178,611
64,500
5,000
379,924
190,701
66,500
5,000
363,639
186,548
53,272
-
16,285
4,153
13,228
5,000
Total Expenditures
628,035
642,125
603,459
38,666
(65,925)
101,362
Net Change in Fund Balance
$
(51,835)
$
Fund Balance, July 1, 2014
556,567
Fund Balance, June 30, 2015
$
21
657,929
$
167,287
ARDEN PARK RECREATION AND PARK DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Budgeted Amounts
Original
Final
Revenues
Special assessments
Use of money and property
Other revenues
$
Total Revenues
172,500
500
-
$
Actual
172,500
500
-
$
171,199
268
-
Variance
Favorable
(Unfavorable)
$
(1,301)
(232)
-
173,000
173,000
171,467
(1,533)
Expenditures
Salary and benefits
Services and supplies
Capital outlay
118,127
54,873
-
118,127
54,873
-
118,127
44,109
-
10,764
Total Expenditures
173,000
173,000
162,236
10,764
Net Change in Fund Balance
$
-
$
-
9,231
Fund Balance, July 1, 2014
89,899
Fund Balance, June 30, 2015
$
22
99,130
$
9,231
ARDEN PARK RECREATION AND PARK DISTRICT
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2015
Note 1:
Budgets and Budgetary Accounting
As required by State law the District prepares and legally adopts a final operating budget. Public hearings were
conducted on the proposed and final budget to review all appropriations and the source of financing.
Budgets for the general and special revenue funds are adopted on the modified accrual basis of accounting. The
budgets for the general and special revenue funds are the only legally adopted budgets.
At the object level, actual expenditures cannot exceed budgeted appropriations. Management can transfer
budgeted amounts between expenditure accounts within an object without the approval of the Board of
Directors. Significant amendments and appropriation transfers between objects or funds must be approved by
the Board of Directors. Appropriations lapse at fiscal year-end.
The budgetary data presented in the final budgeted amount in the accompanying financial statements includes all
revisions approved by the Board of Directors.
23
LARRY BAIN, CPA
An Accounting Corporation
_____________________________________________________________________
2148 Frascati Drive, El Dorado Hills, CA 95762 / 916.601-8894
lpbain@sbcglobal.net
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To: Board of Directors
Arden Park Recreation and Park District
We have audited the financial statements of Arden Park Recreation and Park District as of and for the fiscal year
ended June 30, 2015, and have issued our report thereon dated October 23, 2015 We conducted our audit in
accordance with auditing standards generally accepted in the United States of America.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Arden Park Recreation and Park District’s (District) internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
District’s internal control over financial reporting. Accordingly we do not express an opinion on the effectiveness of
the District’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency or a combination of deficiencies in internal
control, such that there is a reasonable possibility that material misstatement of the entity’s financial statements will
not be prevented, or detected and corrected on a timely basis.
Our consideration of the internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control that might be significant
deficiencies or material weaknesses and, therefore, there can be no assurance that all such deficiencies have been
identified. We did not identify any deficiencies in internal control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance. We consider finding
14-1, 14-2 and 14-3 in the following schedule of findings to be significant deficiencies in the District’s internal
control:
Arden Park Recreation and Park District’s Response to Findings
The Arden Park Recreation and Park District’s separate written response to the significant deficiencies identified in
our audit and any follow up for subsequent year corrections has not been subjected to the audit procedures applied in
the audit of the financial statements and accordingly, we do not express an opinion on the responses
24
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal controls over financial reporting
and the result of that testing, and not to provide an opinion on the effectiveness of the District’s internal control. This
report is an integral part of an audit performed in accordance with auditing standards generally accepted in the
United States of America in considering the District’s internal control over financial reporting, accordingly this
report is not suitable for any other purpose.
This report is intended solely for the information and use of the board of directors, management, Sacramento County
Auditor Controllers Office and the Controller’s Office of the State of California.
Larry Bain, CPA,
An Accounting Corporation
October 23, 2015
25
INTERNAL CONTROL FINDINGS
Significant Deficiencies Not Deemed Material Weaknesses
FS 15-1
We noted the District had a lack of segregation of duties, as one person is capable of handling all aspects of
processing transactions from beginning to end. A lack of segregation of duties increases the risk of potential errors or
irregularities; however, due to a limited number of personnel an adequate segregation of duties is not possible
without incurring additional costs. This is a common condition for entities of this size. We have also noted this
comment in previous audits.
FS 15-2
During our testing of accrued payroll taxes we noted the District is carrying a credit balance of $6,529.77. The
accrued payroll tax account should clear to a zero balance each month. This was a finding during our prior audit.
Current year follow up: During the current year audit the condition had not changed. As of June 30, 2015 the
unreconciled credit balance was $6,544.27.
Recommendation: We recommend the District review why the accrued payroll tax account is carrying a balance,
have the board adopt a resolution to adjust the account to agree to the underlying supporting documentation and then
submit a journal voucher to Sacramento County to adjust the accrued payroll tax account.
FS 15-3
During our audit we noted the District did not have a written financial and accounting policy/manual that included
internal control procedures. The District should create the financial and accounting policies that demonstrate how
transactions are processed from beginning to end. The policy should include the processes for internal controls
that are designed to provide reasonable assurance that objectives related to effectiveness and efficiency of
operations, reliability of financial reporting and compliance with applicable laws and regulations are met. This
also should include documenting controls over processing transactions, authorizing transactions and for
maintaining and safeguarding assets.
The District also relies on the external auditor to ensure its financial statements are in accordance with GAAP. In
addition, the District relies on the external auditor to ensure that all necessary disclosures are included in the notes to
the financial statements. The District does not employ a staff member with the necessary knowledge and training to
prepare governmental financial statements. In accordance with Statement of Auditing Standards No. 115 external
auditors cannot be part of an entity’s internal controls over preparation of the financial statements and are prohibited
from auditing their own work, which would impair their independence. We noted these conditions during our prior
audit.
Current year follow up: The draft of the accounting policy/manual was presented to the Board in the 2014-15
fiscal year and should be adopted during the 2015-16 fiscal year.
Recommendation: We recommend the District also consider training staff in preparing GAAP financial statements
or hire an external qualified accountant to prepare the GAAP financial statements. The District could opt to take no
action on this if it considers the cost will outweigh the benefit.
26